Sh. Shiv Kumar Aggarwal, V. ACIT, New Delhi

CO 78/DEL/2013

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8682 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 19-07-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2003-2004
• Appeal Filed On: 22-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: JYOTI LEGHA
• Keywords: Bogus purchase
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G: NEW DELHI) BEFORE SHRI I. C. SUDHIR, JUDICIAL MEMBER AND SHRI B.C.MEENA, ACCOUNTANT MEMBER ITA NO.3200/DEL/ 2012 & C.O NO-78/DEL/2013 (ASSESSMENT YEAR :2003-04) ACIT VS. SHIV KUMAR AGRAWAL CIRCLE-24 (1), ROOM NO. 238 PROP. M/S PYRAMID TIMBER -B-2 ND FLOOR, KHARSA NO. 619/6, CHATTARPUR C.R. BUILDING, I.P. ESTATE NEW DELHI NEW DELHI - AAGPA3122P (APPELLANT) (RESPONDENT) ASSESSEE BY :SMT. JYOTI LEGHA, SR. D .R REVENUE BY : SHRI KAPIL GOEL, A DV. ORDER PER I. C. SUDHIR, JUDICIAL MEMBER: THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDER ON THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITIONAL GP OF RS.1,76,076/- @ 7.3% ADOPTED BY THE AO ON THE SAME SALES TURNOVER ON WHICH THE PROFITS HAD ALREADY BEEN COM PUTED BY THE ASSESSEE. IT A NO. 3200/DEL/2012 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS .11,02,331/- MADE BY THE A.O ON ACCOUNT OF BOGUS PURCHASE. 2. WE HAVE HEARD AND CONSIDERED ARGUM ENTS ADVANCED BY THE PARTIES IN VIEW OF ORDERS OF THE AUTHORITIES BELOW AND MATERIAL AVAILABLE ON THE RECORD. 3. THE RELEVANT FACTS ARE THAT THE ASSESS EE, THE PROPRIETOR OF M/S PIRAMIT TIMBER IS ENGAGED IN THE BUSINESS OF PLY WOODS. A SURVEY U/S 133A WAS CONDUCTED ON 26/2/2002 DURING THE COURSE OF WHICH P HYSICAL STOCK WORTH RS.98,09,719/- WAS FOUND AND AFTER DEDUCTING THE G.P @ 7.73% THE VALUATION OF STOCK WAS WORKED OUT AT RS.90,86,742/- AS AGAINST THE VALUE OF STOCK AS PER THE BOOKS OF ACCOUNTS AT RS.40,84,692/- . THE AMOUNT IN DIFFERENCE I.E RS.50,02,050/- (RS.90,86,742/- -RS.40 ,84,692/-) WAS TAKEN AS ACCESS STOCK. ON CONFRONTATION WITH THE ASSESSEE TH E ASSESSEE SURRENDERED THE ACCESS STOCK WORTH RS.50,02,050/-. IN ITS RETU RN OF INCOME FILED SUBSEQUENTLY THE ASSESSEE DECLARED INCOME OF RS.45,8 7,883/- ON THE TURNOVER OF RS.1,74,80,498/-, G.P OF RS.51,60,396/- & N.P OF RS.45,87,883/-. THE A.O, HOWEVER, MADE ASSESSMENT AT THE INCOME OF RS.68,07,480/- AGAINST THE RETURNED INCOME OF RS.45,87,883/-. THE ADDITION OF RS.22,19,597/- WAS THUS MADE BY THE A.O. THE A.O H AS MADE ADDITIONS BY ADOPTING THE SURRENDERED INCOME DURING THE SURVEY A T RS.50,02,050/-, BY ADOPTING THE G.P OF RS.12,76,076/- @ 7.3% ON THE TOT AL SALES TURNOVER OF RS.1,74,80,498/- AND AFTER DISALLOWING THE PURPOSES OF RS.11,02,331/-. THE A.O HAS ALLOWED THE TRADING ACCOUNT EXPENSES OF RS.5 ,72,977/-. THESE IT A NO. 3200/DEL/2012 3 ADDITIONS WERE OBJECTED BEFORE THE LD. CIT(A) AND T HE LD. CIT(A) HAS DELETED THE SAME, WHICH HAS BEEN QUESTIONED BY THE REVENUE. 4. IN SUPPORT OF THE GROUNDS, THE LD. D.R H AS BASICALLY PLACED RELIANCE ON THE ASSESSMENT ORDER. THE LD. A.R ON THE OTHER HAND TRIED TO JUSTIFY THE FIRST APPELLATE ORDER WITH THE SUBMISSION THAT THE AO HAD MADE ADDITIONS IN QUESTION WITHOUT VALID REASONS. IT WAS SUBMITTE D THAT THE A.O HAD ALSO IGNORED SOME ARITHETICAL ERROR IN COMPUTATION OF IN COME DESPITE REQUEST MADE BY THE ASSESSEE IN THIS REGARD WHICH HAS ALSO BEEN CONSIDERED BY THE LD. CIT(A) WHILE GIVEN THE RELIEF. 5. HAVING GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW WE FIND THAT THE ASSESSEE HAD POINTED OUT CERTAIN COMPUTATION ER ROR DURING THE COURSE OF SURVEY OF RS.13,92,665/- WHICH RESULTED IN AN ACC ESS AMOUNT OF STOCK ADOPTED BY THE A.O. IT WAS FURTHER POINTED OUT ABO UT THE ERROR OF RS.1,05,529/- BECAUSE OF THE MULTIPLICATION OF THE A MOUNTS AND TAKEN ARE NOT THE AMOUNTS DURING THE COURSE OF SURVEY AND AS SUCH THERE WAS EXCESS STOCK TO THIS EXTENT. THE LD. CIT(A) CALLED REMAND REPORT ON THIS CLAIM OF THE ASSESSEE. IT WAS CONTENDED FURTHER BY THE ASSE SSEE THAT THE ASSESSEE HAD DECLARED THE G.P @ 29.52 % OF RS.51,60,396/- ON THE TOTAL TURNOVER OF RS.1,74,80,498/- AND HAD FILED THE RETURN OF INCOME OF RS.45,87,883/- WHEREAS THE A.O HAS AGAIN ADOPTED THE ADDITIONAL G. P @ 7.3% ON THE SAME TURNOVER AND HAS MADE THE ADDITION OF RS.12,76,076/ - WITHOUT ANY JUSTIFICATION. IT WAS SUBMITTED THAT THE BOOKS OF ACCOUNTS OF THE ASSESSEE WERE AUDITED BUT EVEN THEN THE A.O HAS DISALLOWED T HE PURCHASES WORTH RS.11,02,331/- WITHOUT ANY VALID REASON. CONSIDERIN G THESE MATERIAL IT A NO. 3200/DEL/2012 4 ASPECTS OF THE CASE AS WELL AS REMAND REPORTS DATED 4/7/2007 & 12/1/2009 CALLED BY THE LD. CIT(A) ON THE SUBMISSIONS OF THE ASSESSEE, THE LD. CIT(A) HAS COME TO THE FOLLOWING CONCLUSION IN PARA NOS. 4.5 & 4.6 OF THE ORDER:- 4.5. I HAVE CONSIDERED THE ORDER OF THE AO, REMAND REPORT OF THE AO AND THE SUBMISSIONS OF THE ASSESSEE AND I FIND CONS IDERABLE MERIT IN THE SUBMISSION OF THE ASSESSE THAT THE AO IS NOT JU STIFIED TO IGNORE THE ARITHMETICAL MISTAKE OF RS.14,98,194/- WHICH HAD OC CURRED IN THE COMPUTATION OF INVENTORY OF STOCK DURING THE COURSE OF SURVEY AND THE SAME HAS BEEN ACCEPTED BY THE AO IN THE REMAND REPO RT DATED 4/7/2007 (ANNEXURE-A). THERE IS ALSO NO JUSTIFICAT ION FOR ADOPTING ADDITION GP OF RS.12,76,076/- @ 7.3% ON THE SAME SA LES TURNOVER ON WHICH THE PROFIT HAS BEEN ALREADY COMPUTED BY THE A SSESSEE AND THE RETURN HAS BEEN FILED. THERE IS ALSO NO PROPER JUS TIFICATION OR ANY VALID REASONS FOR DISALLOWING THE PURCHASES TO THE EXTENT OF RS.11,02,331/- AS DISCUSSED EARLIER. 4.6 AFTER CONSIDERING ALL THE FACTS AND CIRCUMSTAN CES OF THE CASE, I AM OF THE VIEW THAT THERE IS NO PROPER JUSTIFICATION FOR MAKING THE ASSESSED INCOME AT RS.68,07,480/- AS AGAINST THE RETURN INCO ME OF RS.45,87,883/- WHICH HAS ALREADY TAKEN INTO ACCOUNT MOST OF THE SURRENDERED AMOUNT WHICH WAS OFFERED DURING THE COU RSE OF SURVEY. IT MAY ALSO BE NOTED THAT IF ALL THE ARGUMENTS OF THE ASSESSEE AGAINST ALL THE ADDITIONS ARE CONSIDERED INCLUDING THE ARITHMET ICAL MISTAKE OF RS.14,98,194/- THE ASSESSED INCOME WOULD COME BELOW THE RETURN INCOME. HOWEVER, SINCE THE ASSESSEE HAS FILED THE RETURN INCOME OF RS.45,87,883/- WHICH HAS TAKEN INTO ACCOUNT THE SUR RENDERED INCOME DURING THE COURSE OF SURVEY AND ALSO THE ARITHMETIC AL MISTAKE, IT WILL BE IN THE INTEREST OF JUSTICE TO CLOSE THE MATTER A T THIS POINT AND ACCEPT THE RETURN INCOME OF RS.45,87,883/- AND ACCORDINGLY , THE AO IS DIRECTED TO ACCEPT THE RETURN INCOME OF RS.45,87,88 3/- AND AS SUCH ALL OTHER ADDITIONS ARE HEREBY DELETED. 6. IN ABSENCE OF REBUTTAL OF ABOVE MATER IAL FACTS OBSERVED BY THE LD. CIT(A), BY THE REVENUE, WE DO NOT FIND ANY INFIRMIT Y IN THE FIRST APPELLATE IT A NO. 3200/DEL/2012 5 ORDER ON THE ISSUES AS THE SAME IS REASONED ONE. T HE SAME IS UPHELD. THE GROUND NOS. 1 & 2 ARE THUS REJECTED. 7. CONSEQUENTLY, APPEAL IS DISMISSED. C.O NO. 78/DEL/2013 1. THE CROSS-OBJECTION HAS BEEN P REFERRED BY THE ASSESSEE IN SUPPORT OF THE FIRST APPELLATE ORDER WHICH HAS ALREADY BEEN UPHELD HEREINABOVE IN THE APPEAL PREFERRED BY THE REVENUE. THE CROSS-OBJECTI ON HAS THUS BECOME INFRUCTUOUS AND IT IS DISMISSED AS SUCH. 2. IN RESULT BOTH THE APPEAL AND CROSS-OBJ ECTION ARE DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 19 TH JULY/ 2013. SD/- SD/- (B. C. MEENA) (I. C. SUDHIR) ACCOUNTANT MEMBER JUDICI AL MEMBER DATED THE 19 TH DAY OF JULY, 2013 R. NAHEED COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. CIT (ITAT), NEW DELHI. AR, ITAT NEW DELHI